Flood Waters: Don’t punish some for others’ mistakes

November 27, 2013

Area residents living in modest riverfront homes should not have to pay for the government's miscalculation regarding people who like ocean views. Yet unless a federal law passed last year is repealed or amended, that may happen.

Premiums for federal flood insurance are about to rise faster than a hurricane-driven storm surge. One insurance agent told us the premium for a specific home, once $1,000 a year, will go up to $6,000 under the new law. Rates for businesses may increase as much as seven-fold.

People who already live in houses covered by flood insurance will get something of a break - but not much. Their premiums cannot be increased by more than 20 percent each year. Still, at the end of five years, that means they will be paying astronomical premiums.

Those attempting to sell homes in flood zones face an immediate problem. Higher flood insurance rates go into effect fully and immediately for buyers. That will make it much more difficult, perhaps impossible, for some local residents to sell their homes.

Residents of many flood-prone areas were given special consideration when the federal flood insurance program was created about 45 years ago. They were not charged what the government termed "full-risk" premiums, perhaps in view of the fact that in some places - including many areas of West Virginia - much of the land on which buildings can be constructed at reasonable cost is in floodplains.

That changed when the 2012 law was enacted. Now, "full-risk" premiums are being phased in for everyone.

For most of the flood insurance program's history, the old premium strategy worked, providing enough revenue to pay claims. What changed?

Hurricane Katrina in 2005, Hurricane Ike in 2008 and Superstorm Sandy last year flooded the program with claims. As a result, it has a $25 billion debt.

Most of the claims related to those storms occurred at or near coastlines. Billions of dollars in damage occurred at oceanfront homes constructed during the past couple of decades - by people taking advantage of relatively low flood insurance rates.

In other words, the flood insurance program is underwater not because of claims from inland regions like ours, but because of those on or near coastlines. Yet residents of our area are going to pay much higher insurance premiums because the government underestimated the risk in coastal areas.

Some members of Congress, realizing a mistake was made, are considering a change in the law enacted last year. They should proceed with it. Area residents should not have to pay more for flood insurance to cover for people who should have known better than to build homes and businesses squarely in the paths of tropical storms and hurricanes.